East African financial holding company I&M Group has increased its stake in I&M Bank Tanzania to 95.5% after acquiring an additional 15 percent of the lender, the group said, reinforcing its bet on growth in one of the region’s least penetrated banking markets.
The transaction, announced on Friday, marks the exit of two long-standing private equity shareholders, Proparco and Microfinance East Africa Ltd (MEAL), after an investment cycle spanning about 15 years. I&M Group said the deal has received all required regulatory approvals, with the remaining 4.5 percent of shares held by private investors.
I&M Group, which is listed on the Nairobi Securities Exchange, said the buyout represents an important milestone in the development of its Tanzanian subsidiary and reflects confidence in the country’s long-term economic and financial prospects. The group operates banking businesses in Kenya, Rwanda, Uganda, Tanzania and Mauritius.
The increase in ownership gives I&M Group near-full control over I&M Bank Tanzania’s governance, commercial strategy and capital allocation, at a time when regional banking groups are seeking greater operational integration and tighter risk management across their networks.
Tanzania’s banking sector remains relatively underdeveloped compared with some of its East African peers. According to a report published in January 2025 by the French Development Agency (AFD), total banking sector assets amount to about 30% of gross domestic product, a level well below that of Kenya or South Africa. Private-sector credit has averaged around 12.5 percent of GDP since 2007, reflecting limited access to formal finance for households and businesses.
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The market is also highly concentrated. Two private banks control nearly half of total banking assets, loans and deposits, underscoring both competitive pressures and the potential for smaller and mid-sized players to expand their footprint. Analysts say this environment offers opportunities for banks able to scale retail services and deepen lending to small and medium-sized enterprises, which remain underserved.
For Proparco, the private-sector financing arm of the French Development Agency, and MEAL, the exit concludes a long investment period that coincided with the expansion of I&M Bank Tanzania from a niche operation into a more established player in the local market. I&M Group did not disclose the value of the transaction.
Tanzania, East Africa’s second-largest economy by population, has posted steady growth in recent years, supported by public investment in infrastructure, mining and energy. However, financial inclusion remains uneven, and policymakers have identified the expansion of credit to businesses as a key lever for economic transformation.
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I&M Group said the increased stake would allow it to better align the Tanzanian unit with the group’s regional strategy, including digital banking initiatives, cross-border trade finance and support for regional supply chains. Greater ownership also improves transparency and earnings visibility for shareholders of the parent company, analysts say.
For I&M Bank Tanzania, the focus now shifts to execution. The bank is expected to intensify efforts to grow its customer base, increase lending volumes and support national development priorities, particularly financing for small and medium-sized enterprises and intra-regional trade.
The transaction reflects a broader trend across East Africa’s financial sector, where regional banking groups are consolidating ownership of their subsidiaries. By increasing stakes, parent companies aim to strengthen oversight, streamline decision-making and position themselves to capture growth as economies deepen and financial services expand.
As competition intensifies and regulators push for stronger capital and governance standards, analysts expect further consolidation and strategic repositioning among banks operating in Tanzania and across the wider region.
